The Gambling Commission (GC) has released the first in a series of reports analysing the landscape of the UK’s online black market, in what is the regulator’s largest research undertaking on the unlicensed sector in its history.
The initial report has identified consumer behaviours and the motivation for engaging with illegal online operators, as well as profiles of users who do.
Andrew Rhodes, GC CEO, outlined the regulator’s reasons behind the report and how it will assist the body in its ongoing battle to thwart the threat of the black market.
“The illegal online market is unsafe, unfair and criminal – that is why the Commission has invested heavily in this area in recent years,” he said.
“To be even more effective in combatting the illegal market it’s vital that we have both a deep and broad understanding of how it operates, and this insight is a crucial step in building that understanding in a very complex area to research.”
New hub, same hopes
As part of the GC’s plans to tackle the illegal sector, it has also announced the launch of its new illegal gambling hub, which will see the regulator further ramp up its efforts.
According to the GC, technology makes eradicating the black market in its entirety “impossible”, but the aim of the new hub is to ensure the UK market is one that is incredibly difficult to serve via illegal means.
The GC noted its commitment to ongoing investment in its illegal markets team, as well as remain vigilant in its search for “key facilitators” of the black market, such as search engines, payment providers and social media channels.
The regulator will also continue to work in collaboration with other domestic and international law enforcement organisations, as well as share relevant information with the UK government.
Collaboration is a theme of the GC’s strategy against illegal online activity, with the regulator noting it will leverage industry insight and specialist expertise to identify areas of weakness within the black market and thereby always be improving its overall knowledge of the space.
Rhodes added: “We are determined to protect consumers and maintain confidence in the regulated sector by taking robust, evidence-led action.
“Since April 2024 we’ve seen a tenfold increase in our disruption activity, and we intend to continue to work with a wide range of partners to build on this success.”
Four reports
The GC outlined that this report, titled ‘Consumer behaviours, motivations and personas’ is the first of four to be published.
The second, which the regulator noted will focus entirely on engagement data and trends, is due to be released later this month, with the intention of providing a “fuller picture of the illegal online market”.
Report three of the study will centre around the GC’s enforcement and disruption activity, detailing the work conducted by the regulator’s illegal markets team. This is due to be released in October.
The fourth and final report will be published in November and will focus on the difficulties of estimating the size of the illegal online market in the UK.
All four reports aim to answer key questions surrounding the black market, including which demographics are drawn to it and why, how easily accessible the illegal market is, as well as which of the GC’s strategies are effective to limiting its reach.
Phase one’s findings
For identifying the types of customers engaging with the black market, the GC partnered with Yonder Consulting to conduct a multi-phase study that deployed both quantitative and qualitative research methods.
The research found there are four broad user demographics who engage with the black market, with the first being players who self-exclude from all UK-licensed operators, via GAMSTOP or other blocking schemes or software.
The report noted that all four of these identified groups have varying awareness of the illegal online market and different reasons for engaging with it.
The report labels the second group as “skilled advocates”, defined by the regulator as “individuals who knowingly and systematically engage with illegal websites, motivated by the desire to acquire new skills, use digital or foreign currencies and explore a variety of new game types”.
The research also recognises a third group as “social explorers”, namely players who happen across black market operators via social media and online forums, noting that many will often trial gambling with black market outfits before fully engaging.
The fourth group is referred to as “accidental tourists” – players who find black market gambling sites accidentally and engage with the sector out of ignorance.
This initial phase of the study determined that those engaging with the illegal online market do so to supplement their gambling activity with licensed sites in the regulated space, rather than use illegal ones exclusively.
Key motivations for engagement included superior odds and offers, alternative payment methods, less strict ID verification processes and access to games not available in the UK.
Within those four groups, men aged between 18 and 24, players who gamble often and players who score eight or above on the Problem Gambling Severity Index were listed as sub-sections most likely to gamble on the black market.
The GC’s strategy
Ben Haden, the GC’s director of research and statistics, highlighted some of the learnings from the study so far.
“Our research so far shows that the debate on approaches to disrupting the illegal market, and influencing and informing future consumer behaviour, needs to be nuanced and strategic – built on appreciation of mainstream trends of online usage, associated trust and consumer behaviours, as well as evolving gambling trends,” he explained.
“Our ongoing work with consumers will also focus on understanding the relative size of the key audience groups that use illegal gambling websites, and how we appropriately target our resources as a result within our regulatory remit.”
On the impact illegal activity has on the UK’s regulated sector, Haden added: “There is a legitimate question to understand what is genuinely lost from the legal market when consumers engage with illegal websites.
“Is the spend that is taking place in the illegal market – often from those who are self-excluded or could potentially be experiencing harm – spend that we, or the industry, would want to see back in the legal market? Our work to build a deeper understanding of consumer experiences will be an integral part of addressing this question.”
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Regulator reveals aims to identify the best methods to combat an illegal online market CEO Andrew Rhodes slams as “unsafe, unfair and criminal”
The post Gambling Commission publishes first of four reports analysing the UK’s black market first appeared on EGR Intel.